Political Risk Latin America Blog @PolRiskLatam

Brazil Pumped amid New Hydrocarbon Discovery

Posted in News and Articles by politicalrisklatam on August 19, 2010

by Levi J. Jordan for Americas Society/Council of the Americas, August 19th, 2010.

In a move that could impact foreign policy on top of energy policy, Brazil last week announced the discovery of a massive natural gas reserve a few miles off its northeastern coast. The hydrocarbon field was found on August 11 by Brazilian oil and gas giant OGX Petroleo e Gas Participacoes SA in the underexplored Parnaiba Basin and contains an estimated 15 trillion cubic feet of natural gas. “The discovery was so important that I personally called President [Luiz Inacio Lula da Silva] Lula to give him the news,” said OGX Founder Eike Batista. The estimate of the undersea discovery instantly doubled Brazil’s known natural gas reserves—previously estimated at 12.9 trillion cubic feet—and could offset a dependence on the resource from neighboring Bolivia.

Brazil’s MPX Energia SA (which also co-owns the newly discovered field) has since announced plans to develop the offshore deposit and construct a power plant along the coast of the nearby state of Maranhao to process the extracted natural gas. The Parnaiba discovery could also allow Brazil to follow in the footsteps of Peru by developing its own natural gas reserves and producing liquefied natural gas (LNG) for export around the world. Given the 2007 oil discovery in the offshore Tupi pre-salt deposits, the Parnaiba discovery adds to Brazil’s stature.

Initial seismic data suggested the newfound natural gas field could produce as much as 15 million cubic feet of natural gas per day, a reality that could cut Brazil’s current imports of natural gas in half by supplying between 25 to 30 percent of Brazil’s domestic demand. On average, Brazil consumes 40 million cubic feet of natural gas a day and in 2009 it consumed almost 300 billion cubic feet of the precious resource. Brazil still relies heavily on its neighbors to supply its needs, obtaining roughly 99 percent of its natural gas imports from Bolivia. (continue reading… )

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2 Responses

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  1. htomfields said, on August 23, 2010 at 4:53 pm

    The small-scale LNG plant allows localized peak- shaving to occur – balancing the availability of natural gas during high and low periods of demand. It also makes it possible for communities without access to natural gas pipelines to install local distribution systems and have them supplied with stored LNG.

    http://www.inl.gov/research/lng-plant-technology/

    • politicalrisklatam said, on October 4, 2010 at 2:32 pm

      Thanks for your comment!


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